Dealing With The Results of a Disappointing Survey

If you are buying a property, receiving the results of your survey is a significant step towards finalising your purchase. However, what if those results are disappointing? It can be a shock to discover your dream home is less than perfect. You may even question whether you should proceed.

‘A disappointing survey report can be very unsettling,’ agrees Rebecca Handford, a Partner in our Residential Property team. ‘However, there is no need to panic. While this can feel like a setback, it is important to stand back and consider things objectively.’

You should give your solicitor a copy of your report and discuss any concerns with them as soon as possible. There may be relevant information in a search result or your seller’s replies to enquires, and your solicitor may be able to find out more by raising additional enquiries.

Here Rebecca, offers some guidance on what to do when faced with a survey that does not match your expectations.

It can be easy to feel overwhelmed by a survey report especially if you are a first-time buyer. Remember though that the survey is for your benefit. One of its aims is to confirm the property’s value, so you do not unknowingly pay more than the property is worth. But it also gives you detailed information about your purchase, identifying any problems that need attention or further investigation.

The role of the property survey

The survey report is a useful tool to help you assess a property’s maintenance requirements and the cost and urgency of any necessary repairs. Even so, seeing a list of your prospective new home’s defects can be disheartening.

It is important to remember the surveyor’s focus is, inevitably, on what is wrong with the property. Unlike an estate agent, they are not trying to sell the property to you, but to spot any hidden problems.

Ensure you understand your survey fully

Surveyors tend to adopt a cautious approach and very few, if any, reports come back perfect. For example, they are likely to include wear-and-tear issues, historic or cosmetic defects, which your surveyor is bound to note. You should distinguish between the different types of defects - those which are superficial, and those that are structural or expensive to fix.

Many surveys use a traffic light system;

• green denotes an item is in good condition;
• amber that there is a defect that requires non-urgent attention;
• red signifies a defect that is either urgent or significant, or both.

The traffic light system can be a very effective way of giving an overview of the state of a property. However, it can be disconcerting to see a red light, or a series of amber lights. If this applies to your report, try to see beyond the colour of the light to evaluate the underlying issue.

Ask yourself how serious the problem really is and assess the ease and cost of remediation. Some ‘red light’ items may need addressing urgently but be relatively simple to fix, while a series of amber lights may indicate more widespread issues with longer term cost implications.

Surveys can contain a lot of technical information, and sometimes the underlying issues can be hard to understand. If there is something in your report you do not understand, speak to your surveyor. They should be happy to explain their findings to you.

Further information

Some issues in the report may be marked ‘R’ to indicate that there are documents associated with the following elements. You should review these documents with your solicitor.

For example, further information about a previous claim under an NHBC warranty may reveal more about the extent of a structural issue flagged in your report. Sometimes, there may be additional reports the seller commissioned when they bought the property, which may clarify the issue.

Understanding the implications for your budget

Some more detailed surveys, such as the RICS Home Survey Level 3, may outline repair options for a defect. In most cases though, it will be down to you to evaluate the issue and how best to remedy it. However, there are many sources of help including from your surveyor and solicitor.

Depending on the defect, a specialist survey or further investigations could clarify the extent of a particular issue. For example, if the electrics in the property are old then you may want to consider an Electrical Installation Condition Report (EICR), which will tell you about any potentially dangerous defects. Other areas that may merit specialist investigations include the presence of damp, woodworm, asbestos, or suspected subsidence or heave. Old or foul-smelling drains can merit a CCTV drain survey. If there is an area of concern, or ambiguity, ask your surveyor whether further tests would assist. Your solicitor may also be able to help and will know whether there are any additional searches that could provide more information.

For some defects, particularly those where the solution is readily identifiable, you may want to ask a local builder or tradesman for their view. They can tell you how long the defect would take to fix, the likely level of disruption and costs involved. Ideally, you should get three quotes to compare. Your seller or their estate agent may recommend someone based on their local knowledge. If this is the case, ensure you also get an estimate from someone fully independent so that you get an objective view of likely costs.

Decide on your strategy

The next step is to discuss the issues with your solicitor to decide what to do, depending on your options. If the defects are not a major concern for you, you may choose to proceed on the agreed basis. This could be appropriate where the issue is typical for the area, for example, the background presence of radon. There are further tests you can carry out and ways to mitigate that risk, and your solicitor and surveyor can advise you on these. If you want to buy in that location, you may have to accept the presence of that gas to some degree.

Conversely, if the problem identified is severe, or something you know you could not live with, you may choose to pull out of the purchase entirely.

In other cases, matters may be less clear cut. You may still want to proceed but have concerns, or fear you are paying over the odds for a property in that state. Here, your solicitor could advise you on how to negotiate some concessions from your seller. This could be either a price reduction or for the seller remediate the defect, or to reimburse your costs in doing so.  Your solicitor, who will be familiar with these situations, can discuss your options with you. They will also be able to advise you on the detail of any proposal. For example, as a buyer, you will generally want to be satisfied that the works are properly completed to an acceptable standard before you move in. So, the agreement should contain some mechanism for ensuring this.

Any arrangement would need to be agreed by both parties, and the seller may have their own views on what is acceptable. For example, they may require the cost to be shared or request a longer period than you would like to complete the works. In which case, you may want to agree a retention of part of the purchase price rather than delay completion. Each situation will be different. However, where there is flexibility on both sides, it is usually possible to find a workable solution.  

How we can help

Dealing with the fallout from a survey can sometimes be stressful, but having the right professionals on board will help alleviate this. Renegotiating the terms of your purchase will require someone with the right technical knowledge to guide you. So, choose a solicitor who has these qualities and who can give your purchase their close personal attention. This will boost your chances of reaching an acceptable compromise with your seller if that is what you want. Just as importantly, it will ensure those terms are practicable and accurately reflected in your contract.

For further information, please contact Rebecca Handford in our Residential Property team on 01529 302800 or email RHandford@sillslegal.co.uk. 

Sills & Betteridge LLP have offices in Lincolnshire, Yorkshire and the East Midlands.